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T H E J O U R N A L OF I N D U S T R I A L A N D E N G I N E E R I N G C H E M I S T R Y
Vol.
12,
No.
THE. CHEMICAL INDUSTRY AND TRADE OF JAPAN
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By 0. P.Hopkins, Washington, D.C. Received January 3, 1920
The war has stimulated industrial development in Japan in a most remarkable manner, and no lines have been more favorably affected t h a n those concerned with the production of chemicals and allied products. I t is safe t o say t h a t the American chemical manufacturer is not quite so much interested a t this moment in the markets offered for his goods in Japan as he is in the future competition he may expect from the JaPanese manufacturer in the growing markets of the Far East and even in the Western Hemisphere. The boom in the Japanese chemical industry resulted from the same circumstances t h a t brought about a similar development in the United States-the cutting off of European supplies, with the consequent rise in prices, and the insistent demand for munitions a t very high prices. The Japanese were even more unprepared than we were t o meet the situation t h a t arose when war was declared, and they have naturally not been able t o achieve the same measure of success as we have. But in many lines they have made sound progress, and their present position is deserving of the most careful study. Their efforts have been directed mainly toward the development of a coal-tar industry, the production of alkalies for the paper, glass, textile, and soap industries, progress in metal refining, and the greatest possible utilization of water power in electrochemical processes. The manufacture of iodine and potash from kelp, of glycerin, paints, fertilizers, the tanning of skins and hides, and many minor lines have also been pushed energetically. The match industry was well established before the war. There are many factors t h a t favor the present program. Water power is abundant, cheap, and well distributed throughout the industrial regions. Few concerns pay as high as two cents per kilowatt-hour and some pay less than one cent. The coal supplies are adequate, although not conveniently located. The price is somewhat higher a t the pit-mouth than with us, and by the time the costly transportation is added, the price t o the consumer is very high-$4. 73 a metric ton a t Yokohama, for instance, in 1913,and $17.80 in 1918. Certain raw materials are had in great abundance, either from Japanese sources or from easily accessible sources in nearby countries, such as sulfur, camphor, menthol, vegetable oils of all kinds, kelp, phosphate, lime, silica, and wood. The salt supply is something of a problem, as the government monopoly is considered by the manufacturers not to have worked out t o the best advantage of the alkali industry, but a satisfactory supply is expected eventually. The attitude of the government may be considered a favorable factor, as every encouragement has been given the growing industries, including subsidies t o one large company each in the dyestuff, me-
dicinal, and glycerin industries. One of the most favorable factors is the low-priced labor, although it is well known t h a t labor costs are not relatively so high in the chemical as in some other industries. But Japanese labor is very low priced, despite even war wages. Wages have not risen any more rapidly, proportionally, than in western countries, and while improvements in the standard of living may be expected, i t is not reasonable t o suppose t h a t t h e standard will ever be so high as with us while there are so many millions t o be fed, sheltered, and clothed in so small a n area. The country is badly overpopulated. I n this fact lies the “necessity” upon which the whole political program of the statesmen is based. There are also unfavorable factors which tend t o hold back the expansion of the chemical industry. The supply of technically trained men is inadequate, although a great many foreign engineers have been induced t o come in. The failure of certain individual enterprises is attributed t o faulty engineering. For the most part the laborers have had no experience t h a t fits them for the new work, although there are exceptions, such as the facility with which ceramic workers adapt themselves t o glass-making. This lack of trained chemists and laborers is a very serious one, but i t is something t h a t can be overcome in time. It should not be considered a permanent factor-witness the remarkable manner in which the Japanese have learned t o manufacture the electrical equipment required t o utilize their water power. Lack of equipment has also limited progress, as suitable outfits were difficult t o buy abroad during the war, and manufacturing them a t home has been a slow job. This is another shortcoming t h a t can be remedied in time. A further obstacle in the way of some branches of t h e industry has been the methods used in selling t o t h e new foreign markets. All sorts of irregularities have been charged t o the exporters and much harm done which it will take a long time t o undo. Business immorality is not of course a matter t o be determined by geographical boundaries, and much can be said, and has been said, in extenuation of the faults of the Japanese trader, but a t any rate the harm done in this direction is now well recognized by the Japanese themselves, and the government and commercial organizations are codperating t o remedy the trouble. Matches and glassware, for example, must now pass inspection before they can be exported. The purpose of this paper is t o bring together statistics of production and trade t h a t will give the American manufacturer some definite idea of what the Japanese are actually accomplishing in the field of industrial chemistry. A study of the import statistics will also show what lines can be sold in Japan. A number of industries have been singled out for separate
Feb., 1920
T H E J O U R N A L OF I N D U S T R I A L A N D E N G I N E E R I N G C H E M I S T R Y
discussion. For the most part they are the lines t o which the Japanese are paying particular attention, b u t it has been impossible t o treat all such lines in this manner, as details for all are not available. AS a matter of fact, i t has been difficult t o assemble the facts into a n orderly treatment of the subject, for much of this business is new t o Japanese economists, statisticians, a n d writers, and the sources of information still leave much t o be desired. Even in the official statistics, the statisticians working on t h e production, import, and export returns have a t times used different classifications, units, and arrangements. For this paper it was decided t o use quantities wherever possible, even when t h a t course did preclude interesting totals, for prices have varied so much t h a t they now mean very little in such statistics. Figures are from official Japanese statistics unless otherwise indicated. Some of the descriptive facts have been taken from Japanese trade papers, organs of commercial organizations, and t h e unofficial b u t authoritative Japan Year Book; some have been obtained from officials recently returned from Japan, and some are t o be found in material published b y t h e United States Bureau of Foreign and Domestic Commerce. ACIDS
Not many details are available t h a t bear on the production and use of acids in Japan. Abundant supplies of native sulfur and pyrites make i t possible for manufacturers t o supply t h e country’s needs for sulfuric acid a n d t o do some exporting. The production of hydrochloric acid increased from about 8,000,ooo lbs. in 1913 t o nearly Z ~ , O O O , O O Olbs. in 1917, b u t i t evidently does not enter foreign trade, as no official figures for imports or exports are given. The domestic outp u t of nitric acid went up from 1,077,100 lbs. in 1913 to 4,942,070 Ibs. in 1917 (no foreign trade figures available). Imports of carbolic acid fell from 4,731,134 lbs. in 1917 t o 2,950,867 lbs. in 1918. It has not been produced in large enough quantities t o obtain notice in the official returns. Of the 6,993,760 lbs. of acetic acid produced in 191 7, 5,632,007 Ibs. were exported. There was a falling off in exports of about a million pounds in 1918. Boric, citric, oxalic, salicylic, and tartaric acids are imported in varying quantities, a s shown i n the complete table of imports. CAMPHOR A N D MENTHOL
More t h a n half of the world’s production of natural camphor comes from Formosa (now called “Taiwan” by the Japanese) and Japan proper. Wasteful methods of production and the greatly increased demands for the product have recently made i t advisable for t h e Japanese government t o regulate the exports by allocating supplies t o t h e various consuming countries. The causes for the increased demand are well known. and the reasons assigned for the inability t o meet the demands are scarcity of labor, the destruction of easily accessible trees, and t h e difficulties and dangers attending the exploitation of forests in the wilder sections of Formosa, where hostile savage tribes still make the camphor worker hesitate about sticking t o his job even a t higher wages than most other industries offer. Under government auspices, the situa-
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tion is being very carefully studied and constructive plans p u t into operation for improving the output. Much planting of new trees is being done and a careful survey of all existing sources is going forward. It is also hoped t h a t all districts now menaced by savages will soon be brought under control. I n the meantime all the camphor companies have united t o form one big company a n d expect t o compete t o better advantage for labor in t h e future. The following figures will give a general idea of t h e magnitude of the industry and the export trade (crude, oil, and refined camphor have been lumped together without reducing t h e m t o a common basis) : 1913
. ..... . ... .... ., ........ ..
Production.. , , Exports.. . . 1 Not obtainable.
tbs. 6 284 087
3;278:200
1917 Lbs. 7,334,737 4,126,928
1918
Lbs. (1)
2,333,652
The government is now discouraging the exports of crude camphor, with t h e idea t h a t t h e country can profitably do its own refining. The war served t o revive interest in t h e manufacture of celluloid, which, for some reason or other, had been languishing, and unmanufactured celluloid and such celluloid products as combs, hair pins, and toys are now exported in considerable quantities. The menthol trade, which has virtually been controlled by the Japanese in times past, was hit rather hard by t h e war. Japanese exports reached their ‘nighest point in 1916, when sales abroad amounted t o 511,168 lbs., and since then have declined. There has been an increasing tendency on the part of t h e farmers t o cut down t h e acreage devoted t o peppermint in favor of grain and beans, which pay better. I n two of the principal districts the cut in acreage has amounted t o 5 0 per cent during the last year. DYESTUFFS
When the exports of dyes from Germany were shut off, Japan found herself in the same boat with the United States, England, and France; t h a t is, with extensive dye-using industries and practically no domestic production of dyes t o meet their demands. As a matter of fact, Japan was in a worse plight t h a n any of the others, because there was practically no experience t o fall back upon. She had t o build from the ground u p so far as raw materials, personnel, and equipment went. I n 1915 an act was passed t o subsidize one company for the manufacture of dyestuffs, and under this act was organized the Japan Dyestuff Manufacturing Joint Stock Co., with 160,000 shares of $24.90 each. The government guaranteed dividends of 8 per cent, and there was a disposition a t first o n the part of unprotected manufacturers t o fear the competition from this firm and resent t h e action of the government. I n a short time, however, the demand for dyestuffs sent prices up t o a point t h a t brought t h e m enthusiastically into the business, and early in 1916 i t was announced unofficially t h a t the total production of aniline oil by all companies was 60,000 lbs. a month. By the middle of 1918 there were I O O factories in existence, exclusive of small concerns manu-
T H E J O U R N A L OF I N D U S T R I A L A N D E N G I N E E R I N G C H E M I S T R Y
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facturing inferior goods, with a total capitalization of about $7,500,000. The Japanese dye makers have naturally had difficulty in satisfying their customers in the matter of quality, and there has been much dissatisfaction on t h e score of prices also, but the fact of t h e matter seems t o be t h a t t h e staple dyes are coming forward ‘in large quantities and t h a t the industry seems pretty well established. The leading manufacturers have started a movement t o induce the government t o impose a high enough tariff wall t o make certain t h a t outside competition will not undo the progress made under the stimulation of war prices. The United States now has the major portion of the import trade in aniline dyes and logwood extract, a n d is doing a considerable business in both lines. I n t h e following table are shown Japanese imports from all countries for three different years. The supplies of aniline and artificial indigo in 1913originated almost ‘exclusively in Germany, while the logwood extract came largely from France. The natural indigo purchased in 1918 came from China. PRINCIPAL IMPORTS OF DYES INTO JAPAN 1913 1917
... . . . . . . . . . . ....... . ..... .... ,, .. ., .. .. ., ..
Aniline d y e s . . Artificial indigo.. Natural indigo.. Logwood extract.
Lbs. 9,738,863 2,186,5 13 27,432 955,992
Lbs. 832,947 1.910 85,664 1,649,205
1918
Lbs. 2,538,725 143 1,444,856 3,588,288
It is the opinion of Japanese manufacturers t h a t the future of American participation in the trade will depend upon the ability of Germany t o supply her former customers a t competitive prices, and t h a t the future of both German and American exporters, and therefore of the Japanese dye manufacturers, depends t o a wansiderable extent upon the attitude of the Japanese government on the tariff question. PERTILIZERS
It is probably safe t o say t h a t fertilizers play a more vital part in the agriculture of Japan than in t h a t of any other country in the world. For centuries the intensive cultivation of the soil has demanded their liberal use. Twenty-five years ago dependence was placed mainly on such “natural” manures as nightsoil, stable manure, and fish, and t o some extent upon rice bran and cake from vegetable-oil presses. Then artificial fertilizers were gradually introduced and large quantities of Chilean nitrate, phosphate, ammonium sulfate, and bean cake were imported. Still later, t h e war stimulated home production of fertilizers and to-day enormous quantities of ammonium sulfate and superphosphates, as well as other chemical salts of minor importance, are manufactured by Japanese firms. Potash salts as such do not seem t o play a n important part in Japanese agriculture. Production of chemical fertilizers some time ago reached a point where exports on a considerable scale were made a t fancy prices, but this development was considered detrimental t o the interests of the country until such time as t h e home demand was really met, so the government stepped in and exercised a rigorous control over exports. Before the war ammonium sulfate was imported
Vol.
12,
No.
2
from England t o the extent of about 115,000tons, but when this source was cut off, its production was undertaken successfully by the electrochemical plants, which had already made strides in the manufacture of calcium carbide and atmospheric nitrogen. The gas industry also produces important quantities as a byproduct. At this writing the domestic product is high priced and some fear is felt t h a t English supplies may injure the industry. Latest unofficial figures indicate t h a t the domestic production is somewhat more than half the pre-war consumption. Prohibition of exports led some manufacturers t o export calcium carbide, for which there has been a good outside demand. Phosphate rock for t h e superphosphate industry is obtained from islands in the South Seas and the Indian Ocean. Production of the finished fertilizer has reached something like 500,ooo tons a year, which is more t h a n sufficient for home use, and export markets have become a necessity. Most of the surplus is sold in the Dutch East Indies and in Siberia. The soy-bean cake and meal used so extensively as a fertilizer comes from oil mills in Manchuria and Japan. The consumption of this fertilizer amounts t o more t h a n 1,300,000 tons. It is exported t o the Pacific Coast of the United States when shipping rates are normal, and the exporters hope t o develop this trade further in t h e future. Sodium nitrate comes from Chile. The fish and other animal products used as fertilizers are from domestic sources. Packing-house fertilizers, so extensively used in the United States, are not in evidence in Japan, as t h e people are not meat eaters. There are no statistics showing t h e quantities of nightsoil and stable manure used, but i t is well known t h a t the Japanese, like the Chinese, make the most of these materials. So far as opportunities for American fertilizers in Japan are concerned, they will probably be limited in the future t o packing-house products, specialized mixed fertilizers, and possibly sulfate of ammonia, if competition from English and Japanese producers can be met. GLASS A N D GLASSWARE
The removal of Belgium, Germany, and France from t h e glass trade in the Far East has stimulated the Japanese industry t o a remarkable degree, and this is a line in which the Japanese seems certain t o hold his own a t least, even when the European competition returns. Recent developments are shown statistically in the following table:
..... .. .. . .. . .. .. . .
1913
Production. . $2,914,036 1,646,758 Imports. . . . . . . . . . . . Exports.. . ... . .. 1,652,791 1 Not obtainable. I
.
1917 $13,626,403 1,261,233 6,669,672
1918 (1)
$1,223,614 8,007,614
It is evident t h a t export markets opened t o the Japanese through t h e absence of European competition were the prime factor in this sudden development, and these markets are found chiefly in easily accessible Asiatic countries, although some of t h e product has found its way t o the United States a n d other distant fields. The following official United
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1920
T H E J O U R N A L OF I N D U S T R I A L A N D ENGINEERING C H E M I S T R Y
States statistics show how the trade with this count r y has been affected: Imports from Japan Exports t o Japan..
.
. . . . . . .
1913 $9,053 9,117
1917 $ 98,087
623,014
1918 $351,713 500,232
The increased imports from Japan have consisted of beads and a large total still included under “all other” in the statistics of both governments. The increased exports t o Japan have been largely plate glass, formerly supplied by Europe in qualities apparently not yet produced in sufficient quantities by Japanese manufacturers. According t o a statement recently prepared by the Far Eastern Division of the Bureau of Foreign and Domestic Commerce, the Japanese glass manufacturers have a decided advantage over their competit o r s in the matter of wages, and the laborers are said t o adapt themselves readily t o the industry because of previous experience in pottery making and similar lines. The average daily wage in glass factories in 1 9 1 7 , according t o this statement, was 38 cents for males and 1 7 cents for females over 1 5 years of age, and 1 4 cents for males and 1 1 cents for females under t h a t age. During the war large quantities of soda ash have been imported from the United States, but the domestic production of soda ash and sodium sulf a t e has rapidly increased, as explained elsewhere in this paper. The silica used in a large factory having a n output of ~oo,ooo,ooosq. f t . of window glass a year is obtained from Korea and Anam and is said t o %e of excellent quality. It is interesting t o note t h a t t h e machinery in this factory is practically all driven by electric power. Much of the machinery in t h e larger factories is of American manufacture. The latest production figures are for 1 9 1 7 , but t h e expansion of the industry has continued since t h a t date, according t o later but unofficial reports. MATCHES
Matches are one of the most important of the Japanese -chemical manufactures, and t h e bulk of the production goes into foreign trade. Before the war the value -of the match exports was about half t h a t of the total for all chemicals and chemical manufactures; since then it has dropped down t o about 40 per cent of -that total. The following summary will give some idea of the size of the industry and the extent t o which -the product goes into foreign trade:
............ ................
Production. Exports 1 Not obtainable.
1913 Gross 51,731,010 44,009,245
1917 Gross 52,53 1,551 44,150,011
1918 Gross
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in quality. The Japan Year Book confesses t h a t the boxes and splints are weak and liable t o break, while the friction surface is easily affected by dampness. This same authority states t h a t Japanese matches are sold in Chinese and other nearby Asiatic markets a t about 45 per cent less t h a n their rivals. As this matter of wages is important in appraising the chemical industries of Japan, i t will be worth while t o devote a little space here t o a study of t h a t phase of the match industry, as some figures given in the Industrial Census (in Japanese) make i t possible t o compare establishments with five or more operatives with American establishments included in t h e census of 1 9 1 4 . Wages, of course, have gone up in both countries since t h a t time, but if it is borne in mind t h a t the rise has been somewhat more rapid in this country than in Japan, a general idea of the present relative wage costs in the two countries can be formed. The comparison for 1914 follows: UNITEDSTATES Wage earners: 3,800 Over 14 years: Male.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
JAPAN
17,677 4,075 10,972
Under 14 years
538 2,092 Female.. ............................. $752,258 Wages. . . . . . . . . Average wage. $43 Horsepower. .................... 7,465 335 Production : Gross’ ....................... 49 050 229 60 315 973 Value $12:556:279 $9: 120:562 Average production: 12,908 3,412 Gross per wage earner.. . . . . . . . Gross Der wace dollar. 28 80 Average value
